Lowering Cost of Bio-Ethanol Production Using Electrolytic Process Authors:

Ricardo F. Caro Electrosep, Inc

Robert Hurter HurterConsult Incorporated ABSTRACT Ethanol is an attractive alternative fuel for automobiles and other uses. Current ethanol costs from corn and sugarcane using conventional methods usually requires subsidies from governments to compete. An electrolytic process designed for lignin extraction from lignocellulosic biomass and caustic recovery from black liquor showed costs can be reduced to almost half by adding co-products like pulp for paper production. This paper compares technical parameters and cost projections for ethanol production from corn and sugarcane using pilot results. INTRODUCTION The increasing price of crude oil and other fossil fuels has increased interest in alternative fuel sources around the world. Ethanol fuel production from sugarcane and corn may need improvement in economic payback and lower energy consumption in order to be considered a viable alternative to fossil fuel. In some countries in the 1980’s the production cost for ethanol was estimated over US $1.02 per gallon, or $0.27 per liter (1), which would mean that the sales price of ethanol fuel would have to be over US $2.00 per gallon, or $0.40 per liter for a country that imports the fuel product. Those costs would not allow the ethanol industry to compete in the alternate fuel market. At present, production costs for ethanol have come down to levels over US $0.88 per gallon, or $0.235 per liter (2). The ethanol industry seeks technological alternatives that would lower cost and provide higher margins in order to compete with gasoline and other fossil fuels. This paper compares conventional methods of producing ethanol fuel with an alternative process that would reduce costs and increase revenues by incorporating the use of an electrolytic membrane technology capable of recovering caustic and extracting lignin from black liquor (alkali) streams resulting from pulping processes used in paper manufacturing. The paper reviews the possibility of increasing revenues and lowering energy cost by using the electrolytic technology in biorefineries that produce ethanol from sugarcane and corn. The projections show that the electrolytic technology could provide an improvement in economic feasibility for ethanol production in both cases by generating additional revenues from cellulose (pulp) sales, and by reducing energy costs with the fuel credit derived from lignin (biofuel) that is extracted from the bagasse, or the corn cob materials. Lignin is an organic compound that is present in bagasse, corn cob, wheat straw, softwood, eucalyptus, and other cellulosic (biomass) materials. The extracted lignin material contains high calorific value and can be burned as fuel to generate energy for the plant. The cellulose fiber that is produced after lignin extraction from bagasse, or other raw materials, can be used to manufacture paper. The fresh bagasse obtained after extraction of the sugarcane juice normally contains approximately 50% moisture. This high content of water causes losses of heat in the boiler when the bagasse is used as fuel to produce steam. The lignin produced when the electrolytic process is used contains lower moisture content and can be burned more efficiently in the boiler. This paper reviews the projected economic benefits and briefly evaluates potential energy advantages that could be derived from using the electrolytic process in ethanol production from sugarcane and possibly from corn. BACKGROUND The alcohol industry could lower costs by generating value added co-products to increase revenues and obtain higher economic benefits. In this paper the authors evaluate the possibility of using an electrolytic membrane technology to lower energy cost and make possible the production of cellulose fiber at lower costs.

The advantage of using the electrolytic method is that the bagasse material that is normally burned to produce steam would become raw material for cellulose pulp production as an additional product. The lignin is separated from the bagasse and fed to the boiler as fuel to produce steam at higher efficiency. The lignin fuel produced can lower energy costs and the cellulose product would provide additional revenue and increase profits for the ethanol fuel producer. This paper focuses on ethanol production from sugarcane and lignin biofuel extraction from bagasse material. The economics evaluation of ethanol production from corn is not within the scope of this paper. It could be said that there might be a similarity between economic viabilities of ethanol production from each of those raw materials. The sugarcane option includes ethanol production from fermentation of sugarcane juice and ethanol from corn involves using the corn grain by means of an enzymatic process. Both cases produce a residual biomass material containing lignin that can be a source of cellulose fiber. The economic feasibility of using electrolytic technology for ethanol production from corn grain would be the subject in another study. The objective of this paper is to evaluate the possibility of producing refined ethanol (96°GL) or anhydrous (99.8° GL) as a product that can compete in price with fossil fuels in the market. The data analyzed from pilot tests performed with electrolytic plants shows that production costs for ethanol could be as low as US $0.45 per gallon, or $0.12 per liter of ethanol. MATERIALS AND METHODS The data for extraction of caustic soda, hydrogen and lignin from liquors generated during the pulping process for bagasse, and other cellulosic biomass materials, was obtained from several pilot trials performed at pulp mills in United States, India, the Dominican Republic, Turkey and other countries. The tests were performed with electrolytic pilot plants designed by Electrosep, Inc, a company based in Oregon, USA. The pilots included a patented electrolytic membrane technology that was designed for chemical recovery from alkali streams containing high solids concentrations and capable of performing chemical extraction with minimum fouling of membranes and electrodes inside the cells. The tests were performed at mills that produce cellulose fiber from different types of raw materials. The tests included production of cellulose from sugarcane bagasse, wheat straw, eucalyptus wood, and softwood (pine), as raw materials for pulp and paper manufacturing. The black liquor samples generated at each mill were tested in the electrolytic pilot plants to recover caustic soda, produce hydrogen, and extract lignin. The tests provided operating data on voltage, amperage, temperature, caustic concentration (conductivity), liquor pH, and caustic and lignin extraction yields for each of the above mentioned raw materials. RESULTS AND DISCUSSION Data and results from pilot trials The results from the pilot tests performed for each type of raw material used in cellulose pulp production are summarized in Table 1.

Table 1. Results of caustic and lignin extraction with electrolytic pilot work using different raw materials

Description Sugarcane bagasse Softwood 1. 10% Caustic, 100% basis, kg /day 1.63 49.2 2. Lignin yield, g /L of liquor 35 45 3. Voltage 5.0 4.2 4. Current Density, A /m2 4,400 5,000 5. Energy, kWh /tonne caustic 3,400 3,100

The caustic production rate for each raw material varied depending on the size of the electrolytic membrane cell. The trials for softwood raw material were performed with a pilot plant approximately 30 times larger than the unit used for testing sugarcane bagasse. The current efficiency for caustic production averaged approximately 87%. The lignin yields varied between 32 and 45 grams per liter of liquor depending on which raw material was used. The yield for bagasse raw material was approximately 35 g/L. The energy required was approximately 3,100 kWh per tonne of caustic soda (100% basis), at about 4,400 A/m2 current density. The energy required for softwood bagasse was approximately 3,400 kWh per tonne at 5,000 A/m2. Process description of a biorefinery using an electrolytic system Figure 1 includes a flow diagram of an ethanol fuel biorefinery that uses soda cooking to produce cellulose fiber and electrolysis to recover caustic soda, extract lignin, and produce hydrogen and methane gas as additional products. The example included in the diagram produces 12,000 gallon of ethanol and approximately 35 tons per day of cellulose pulp. The estimated capacity for paper production can be increased from 35 to approximately 45 tons per day by using bagasse fiber plus softwood kraft for quality and fillers in the process. The products and fuels derived from sugarcane in addition to ethanol by the application of the electrolytic technology would provide energy cost reduction as well as additional revenues for the biorefinery. Products description The main products for the biorefinery described in figure 1 are ethanol fuel, cellulose fiber, lignin, hydrogen and caustic soda. Ethanol fuel The biorefinery module described therein includes a production capacity of 12,000 gallon per day of ethanol fuel with 96 percent concentration. The price of ethanol fuel can be estimated between US $1.10 and $1.50 per gallon. The ethanol product can be sold in the international market or it can be used as fuel for alcohol-fueled stoves in third world countries as a substitute to liquid propane gas that is normally used in their kitchens. Cellulose fiber The cellulose fiber produced from bagasse is normally used for paper manufacturing. The bleached fiber from bagasse can also be sold in the international market at an estimated US $395 per tonne or more. Lignin (biofuel) The lignin product obtained from electrolytic treatment of bagasse liquor contains a heat value of approximately 11,000 Btu per pound. The lignin from the biorefinery can be used as fuel to produce energy at high efficiency and provide electricity for the electrolytic unit and other sections of the refinery. The lignin material can also be sold as a value-added organic product to be used in manufacturing vanilla additives for food flavoring, organic fertilizers, low volatility plastics, adhesive agents, and other chemical agents of high commercial value. Caustic soda The electrolytic plant recovers caustic soda from the liquor generated in the digester where bagasse is treated during pulping process. The caustic extracted in the process is recycled back to the digester to continue cellulose pulp production from the bagasse or corn feed stock.

Hydrogen (fuel) The electrolytic unit produces hydrogen gas simultaneously with the caustic extraction process. The hydrogen produced in the electrolytic cells can be burned at the plant to generate energy, or could be sold as fuel for hydrogen-fueled heat engines, or for use in upcoming fuel cell technologies in the market. Methane gas (fuel) The electrolytically treated stream contains hemicelluloses and other organic compounds that can be treated in the anaerobic plant to generate methane gas. The methane produced at the plant can be used as fuel for steam production.

Energy balance discussion The energy produced from burning the lignin biofuel, the hydrogen and methane gas in the boiler is estimated at 310 million Btu per day. The turbo generator would provide approximately 1.73 megawatt of power (7,500 Btu per kWh). This would be enough energy to feed the plant assuming optimum efficiency in equipment performance. If this is the case, the electrolytic unit would consume approximately 1.13 megawatt at 3,400 kWh per tonne of caustic. The mill would consume approximately 0.5 megawatt for sugarcane juice extraction. The balance of 0.1 megawatt would be available for operation of other machinery at the plant. The thermal energy required at the plant would be provided with the low-pressure steam exhaust from the turbo generator (top cycled arrangement) as shown on figure 1. Capital cost estimation The estimated capital cost for the design and installation of a biorefinery rated for 12,000 gallons per day of ethanol fuel and using an electrolytic unit is described on table 2.

RAW MATERIAL 600 tonne sugarcane

(milling 0.5 MW)

ETHANOL FUEL

PRODUCT 12,000 gals /day

Bagasse 198 tonne

PULPING PROCESS, ELECTROLYTIC

UNIT AND ANAEROBIC PLANT

Turbo Generator 1.79 Megawatt

Electricity

STEAM BOILER 310 MM Btu /day

PAPER MACHINE

Lignin biofuel- 12.8 tonne Hydrogen fuel- 0.4 tonne Methane gas fuel- 100,000 ft3

Caustic Soda 8 tonne recycled

Juice from sugarcane

PAPER PRODUCT 30-35 tonne

Cellulose Pulp

Fermentation and

Distillation

Low pressure steam (top cycled)

Figure 1. Flow Diagram of a 12,000 gallon per day Ethanol Biorefinery with Electrolytic Unit

1.13 MW required for electrolysis

35 tonne

Steam

Energy benefits in comparison with other sources and types of fuels The cost of energy for an electric power generating plant using ethanol and other fuels produced at a biorefinery using electrolytic technology can be estimated at US $53 per megawatt-hr, according to the following calculations: US $179,000 net production cost per month 336,000 gals per month x 76,000 Btu per gallon = 25,540 million Btu per month 25,540,000 Btu /7,500 = 3,400 megawatt-hrs per month (7,500 Btu per kWh) $179,000 /3,400 megawatt-hrs = US $53 per megawatt-hr

Projected revenues and cost projections The revenues and cost projections for a 12,000-gallon per day ethanol biorefinery that uses electrolysis are included in table 3.

Table 2. Estimated capital cost

Equipment description Est. installed cost in US dlrs

1. Sugarcane milling machinery 586,000 2. Fermentation and distillation plant 1,850,000 3. Pulping equipment (paper machine not included) 4,204,000 4. Electrolytic plant 4,700,000 5. Anaerobic system 790,000 6. Steam boiler and turbo generator 1,550,000 7. Building and construction 1,800,000 8. Engineering 995,000 9. Land and miscellaneous 750,000 Total estimated capital cost 17,225,000

Table 3. Projected Revenues /Costs of typical month at Biorefinery using Electrolysis

Description Value (US $)

1. Projected monthly revenues Ethanol fuel sales, US $1.50 /gal 506,000 Cellulose fiber sales, US $ 395 /tonne 416,000 Total revenues 922,000 2. Projected monthly costs Raw material, sugarcane at US $18 /tonne 310,000 Operation 75,000 Total cost 385,000 3. Gross benefit 537,000 4. Estimated loan payments, 10 yrs at 8% interest 210,000 5. Volume of ethanol product, gallons per month 336,000 6. Projected unit cost of ethanol, US $ cost per gallon factor (179,000 /336,000): 0.45 385,000 raw material and operations 210,000 loan payments 595,000 total cash outflow 416,000 credit cellulose fiber sales 179,000 net production cost monthly (336,000 gals of ethanol)

The cost of energy for power generation with biofuels would be equivalent to US $53 per megawatt-hr. Figure 2 compares projected costs for electric power generators using eolic energy, carbon, propane gas, fuel oil, and the

CONCLUSIONS The additional revenues and energy savings derived from the electrolytic technology for ethanol production bring significant advantages for the industry and provide increase in economic feasibility for the installation of ethanol refineries that wish to compete in a fuels product market that is very competitive in nature. The data gathered in this study shows that ethanol production from sugarcane can offer prices that are competitive with conventional fossil fuels in the market and maintain attractive economic benefits for investors that wish to participate in the biofuels production industry. ACKNOWLEDGEMENTS The authors wish to thank Keith G. Fuller and David G. Shipley of Electrosep, Granit RD, DuPont-Nafion, the pulp mills, and other organizations that assisted during the pilot works that provided data for this paper. REFERENCES

1. Paturau, J. M. 1987, “Alternative uses of sugarcane and its byproducts in agroindustries”, Food and Agricultural Organization of the United Nations (FAO),

2. Pedro E. Pinho de Assis Oct. 2003, “Estudio de factibilidad de producción de etanol carburante en la República

Dominicana”, Food and Agricultural Organization of the United Nations (FAO), Dom. Republic, 39 pages. 3. Caro, R. F. and Salter, R. J., “Membrane Separation Apparatus and Method”, U.S. Patent 4,787,982 (1988). 4. Herron, J. R., Beaudry, E. G., and Jochums, C. E., “Turbulent flow electrodialysis cell”, WO 94/13858 (1994) 5. Caro, R. F. and Fuller, K. G., “Economic Benefits derived from Recovering Chemicals and Reducing Viscosity

of Liquor with Electrolytic Process at Kraft Mills”, Tappi Pulping/Process & Product Quality Conference, Tappi Press, Boston (Nov. 2000).

6. Lora, J. H., “Options for black liquor processing in non-wood pulping”, Paper 20 in Proceedings of

International Conference on Cost Effectively Manufacturing Paper and Paperboard from Non-wood fibres and crop residues, Pira International, Surrey, UK, October 2001.

7. Lora, J. H., Abächerli, A., and Doppenberg, F., “Debottlenecking the Recovery System of Soda Pulp Mills by

Lignin Recovery and Wet Oxidation – Application to Non-wood Fibers Black Liquors”, Tappi Pulping Conference Proceedings, Tappi Press Atlanta (2000)

8. Abächerli, A. and Doppenberg, F., PCT WO 98/42912 (1998). 9. Azarniouch, M. K. and Prahacs, S., “Recovery of NaOH and Other Values from Spent Liquors and Bleach Plant

Effluents”, U.S. Patent No. 5,061,343 (1991). 10. Cloutier, J. N., Azarniouch, M. K., and Callender, D., “Electrolysis of Weak Black Liquor. Part I: Laboratory

Study”, Journal of Pulp and Paper Science, Vol. 19, No. 6 (1993) 11. Cloutier, J. N., Azarniouch, M. K., and Callender, D., “Electrolysis of Weak Black Liquor. Part II: effect of

process parameters on the energy efficiency of the electrolytic cell”, Journal of Applied Electrochemistry 25 (1995) 472-478

12. Cloutier, J. N., Azarniouch, M. K., and Callender, D., “Electrolysis of Weak Black Liquor. Part III: Continuous

operation test and system design considerations”, Pulp and Paper Canada, 95:5, T210-T214 (1994) 13. Davy, M. F., Uloth, V. C., and Cloutier, J. N., “Economic evaluation of black liquor treatment process for

incremental kraft pulp production”, Pulp and Paper Canada, 99:2, T51-T55 (1998) 6/28/2005

1

Paper Presentation at 2005 TAPPI Engineering, Pulping and Environmental Conference, Philadelphia Marriott, Philadelphia, PA

28 - 31 August 2005

Lowering Cost of Bio-ethanol Production by using Electrolytic Process

12,000 129,000268,000

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ETHANOL VOLUME PROJECTIONS FOR DOMINICAN REPUBLIC

AÑO 2006AÑO 2007AÑO 2008AÑO 2012AÑO 2020

Ricardo F. Caro, PEElectrosep, Inc.

Robert Hurter, MBA, P. Eng. HurterConsult Incorporated

www.HurterConsult.com

Authors:

www.electrosepinc.com

High Ethanol Production Costs and Energy RequirementHigh Ethanol Production Costs and Energy Requirement

Ethanol production costs should be competitive with current Ethanol production costs should be competitive with current prices for fossil fuels. The following table compares sources: prices for fossil fuels. The following table compares sources:

Description Fossil fuel Ethanol (Import) Description Fossil fuel Ethanol (Import) Ethanol (EL)Ethanol (EL)

Production Cost Production Cost ------ ------ US $ 0.45 US $ 0.45

Available Price US $1.20 US $ 1.55 Available Price US $1.20 US $ 1.55 $1.10 $1.10 –– 1.501.50Import LPG per gallon Import LPG per gallon per gallon per gallon

NoteNote: : Prices based on market data for 2005 in the Dominican Republic, Prices based on market data for 2005 in the Dominican Republic,

one of the countries that grows sugarcaneone of the countries that grows sugarcane..

Products Products Derived from SugarcaneDerived from Sugarcane

2

SUGARCANE as Raw Material SUGARCANE as Raw Material -- List of Products derivedList of Products derivedby using by using ‘‘ElectrolyticElectrolytic Membrane ProcessMembrane Process’’

ETHANOL from Sugarcane JuiceETHANOL from Sugarcane JuiceCELLULOSE Fiber for Paper or EthanolCELLULOSE Fiber for Paper or Ethanol productionproductionCAUSTIC Soda using Electrolytic ProcessCAUSTIC Soda using Electrolytic ProcessLIGNIN bioLIGNIN bio--fuelfuelHydrogenHydrogenMethane gasMethane gas (anaerobic process)(anaerobic process)ElectricityElectricity

Other products includeOther products include: :

Lignin as valued product and organic fertilizersLignin as valued product and organic fertilizers

CORN as Raw Material CORN as Raw Material -- List of Products derived List of Products derived by using by using ‘‘Electrolytic Membrane ProcessElectrolytic Membrane Process’’

CORN grain or ETHANOL from grain CORN grain or ETHANOL from grain CELLULOSE Fiber for Paper or Ethanol production CELLULOSE Fiber for Paper or Ethanol production CAUSTIC Soda using Electrolytic Process CAUSTIC Soda using Electrolytic Process LIGNIN bioLIGNIN bio--fuelfuelHydrogen Hydrogen Methane gasMethane gas (anaerobic process)(anaerobic process)ElectricityElectricity

Other products includeOther products include::Lignin as valued product and organic fertilizers Lignin as valued product and organic fertilizers

The Electrolytic Technology The Electrolytic Technology

3

The Electrolytic Membrane ProcessThe Electrolytic Membrane Process

1. The Electrolytic membrane technology developed and patented b1. The Electrolytic membrane technology developed and patented by y Electrosep Inc. is designed for recovery of CAUSTIC soda from Electrosep Inc. is designed for recovery of CAUSTIC soda from black liquor streams which are generated in digesters during black liquor streams which are generated in digesters during cellulose fiber production for papermakingcellulose fiber production for papermaking

2. The electrolytic technology also provides a viable method of 2. The electrolytic technology also provides a viable method of extracting LIGNIN from the weak black liquor as a powder that extracting LIGNIN from the weak black liquor as a powder that can be used as biofuel for power boilers can be used as biofuel for power boilers

3. In ethanol fuel production from sugarcane and corn, sales of 3. In ethanol fuel production from sugarcane and corn, sales of cellulose fiber and other byproducts can provide additional cellulose fiber and other byproducts can provide additional revenues for the biorefinery and reduce net operating costs to revenues for the biorefinery and reduce net operating costs to approximately US $ 0.45 per gallon of alcoholapproximately US $ 0.45 per gallon of alcohol

The Electrolytic Membrane Process (contThe Electrolytic Membrane Process (cont’’d)d)

4. The electrolytic process was successfully pilot tested in pul4. The electrolytic process was successfully pilot tested in pulp and p and paper mills located in the United States, in South America, Turkpaper mills located in the United States, in South America, Turkey ey and India and India

5. The electrolytic pilot tests included wood and nonwood types 5. The electrolytic pilot tests included wood and nonwood types of of raw materials like: raw materials like:

softwood softwood sugarcane bagasse sugarcane bagasse wheat straw wheat straw eucalyptus eucalyptus

Electrolytic Unit

Procesadora de Celulosa y Papel con planta piloto para extracción de Lignina Combustible e Hidrógeno con un Sistema Electrolítico

Electrolytic Process

4

Flow Diagram for SugarcaneFlow Diagram for Sugarcane

Sugarcane Milling Equipment

Fermentation Distillation

Sugarcane Sugarcane JuiceJuice

Bagasse Bagasse 200 TPD 200 TPD @ 50% moisture@ 50% moisture

Pulping Process and Electrolytic Plant Boiler

Turbo Generator

SteamSteam

Methane gasMethane gas

HydrogenHydrogen

LigninLignin

CELLULOSE CELLULOSE FIBER FIBER 35 bone dry tpd 35 bone dry tpd

VaporVapor““TopTop--cycledcycled””

PAPER or ETHANOL (from Biomass)PAPER or ETHANOL (from Biomass)

EnergyEnergy

Caustic Caustic (recycled)(recycled)

Paper Machine or Enzymatic Process for Ethanol Production

ETHANOL Fuel ETHANOL Fuel 12,000 gpd12,000 gpd(from Sugarcane Juice)(from Sugarcane Juice)

SUGAR CANE SUGAR CANE 600 TPD600 TPD

Flow Diagram for CornFlow Diagram for Corn

Corn Plant Components Separation

EnzymaticFermentation

Distillation

Corn Corn Grain Grain

Corn husk and Corn husk and cellulosic biomasscellulosic biomass

Pulping Process and Electrolytic Plant Boiler

Turbo Generator

SteamSteam

Methane gasMethane gas

HydrogenHydrogen

LigninLignin

CELLULOSE CELLULOSE FIBER FIBER

VaporVapor““TopTop--cycledcycled””

ETHANOL (from Biomass)ETHANOL (from Biomass)

EnergyEnergy

Caustic Caustic (recycled)(recycled)

Enzymatic Process for Ethanol Production

ETHANOL Fuel ETHANOL Fuel (from Corn Grain)(from Corn Grain)

CORN CORN FieldsFields

Test Results Test Results

5

Electrolytic Test ResultsElectrolytic Test Results

3,1003,1003,4003,4005. 5. Energy Energy kWh /tonne caustickWh /tonne caustic

5,0005,0004,4004,4004. 4. Current Density Current Density A /A /mm22

4.24.25.05.03. 3. VoltageVoltage

454535352. 2. Lignin yield Lignin yield g lignin /L of liquorg lignin /L of liquor

49.249.21.631.631. 1. 10% Caustic 10% Caustic 100% basis, kg /day100% basis, kg /day

SoftwoodSoftwoodSugarcane Sugarcane BagasseBagasseDescriptionDescription

Cellulose FiberCellulose Fiber38 38 Ton /dayTon /day

Ethanol FuelEthanol Fuel12,000 gals /day12,000 gals /day

LigninLignin30,00030,000 Lbs /dayLbs /day

Hydrogen Hydrogen 650 650 Lbs /dayLbs /day

Electricity 7 megawatts

600600Tons /day Tons /day

of of SugarcaneSugarcane

Summary of Products Projected for Plant rated at 12,000 gpd EthaSummary of Products Projected for Plant rated at 12,000 gpd Ethanolnol

Methane Methane 102,000 102,000 ft3 /dayft3 /day

Raw Material

Caustic soda Caustic soda -- EL EL 88 Ton /day (Recycled)Ton /day (Recycled)

Operating Costs and Sales Revenues Operating Costs and Sales Revenues

7

Capital Cost Capital Cost

Estimated capital cost

Equipment description Est. cost, US dlrs

1. Sugarcane milling machinery 586,000 2. Fermentation and distillation plant 1,850,000 3. Pulping equipment 4,204,000 4. Electrolytic plant 4,700,000 5. Anaerobic system 790,000 6. Steam boiler and turbo generator 1,550,000 7. Building and construction 1,800,000 8. Engineering 995,000 9. Land and miscellaneous 750,000

Total estimated capital cost 17,225,000

Summary of Economic BenefitsSummary of Economic Benefits

8

Projected annual economic benefits for 12,000 gpd Ethanol and 38 TPD Cellulose Fiber

Benefits Plant using Electrolytic Process Projected Value

Projected Revenues from products sales: US $ 9,635,000 Ethanol (US $1.50 per gallon) $5,365,000 /yr Cellulose (US $ 395 per tonne) $4,270,000 /yr Lignin (Fuel)Caustic Soda (Recycled)Hydrogen (Fuel)Methane gas (Fuel)

Estimated Operating Costs: $ 4,129,000 ___________

Projected Gross Benefits: $ 5,506,000

Estimated Investment: $17,300,000

Int. Rate of Return (IRR), US $1.50 /gal ethanol: 29%

Int. Rate of Return (IRR), US $1.10 /gal ethanol: 21%

Estimated Payback Period at $1.10 /gal: 3.8 yrs

CONCLUSIONSCONCLUSIONS

The electrolytic membrane process offers significant benefits toThe electrolytic membrane process offers significant benefits to the the industry industry

The addition of products and byproducts such as cellulose fiber,The addition of products and byproducts such as cellulose fiber,lignin fuel, hydrogen, and others, lower the net production coslignin fuel, hydrogen, and others, lower the net production costs ts and energy fuel requirements for ethanol production and energy fuel requirements for ethanol production

The cost of power generation using the technology can be less thThe cost of power generation using the technology can be less than an US $ 53 per megawatt US $ 53 per megawatt

The net production cost of ethanol fuel production can be reduceThe net production cost of ethanol fuel production can be reduced to d to less than US $ 0.45 per gallon less than US $ 0.45 per gallon

The PRICE of ethanol can be set between US $ 1.10 and 1.50 per The PRICE of ethanol can be set between US $ 1.10 and 1.50 per gallon while maintaining the Internal Rate of Return at more gallon while maintaining the Internal Rate of Return at more than 21% than 21%